SOURCE: The Goldfield Corporation

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August 04, 2016 06:44 ET

Goldfield Announces Strong Mid-Year Results

MELBOURNE, FL--(Marketwired - August 04, 2016) - The Goldfield Corporation (NYSE MKT: GV), today announced strong results for the three and six months ended June 30, 2016. The Goldfield Corporation headquartered in Florida, through its subsidiaries, Power Corporation of America, Southeast Power Corporation and C and C Power Line, Inc., is a leading provider of electrical construction services for the utility industry and industrial customers, with operations primarily in the Southeast and mid-Atlantic regions of the United States and in Texas.

Six months ended June 30, 2016, compared to the same period in 2015:

  • Revenue grew 6.3% to $68.0 million from $64.0 million. Electrical construction revenue increased 3.2%, attributable to continued growth in both master service agreements ("MSAs") and non-MSA electrical construction projects.
  • Income from continuing operations before taxes increased to $13.0 million from $1.2 million. This increase was fueled by a three-fold increase in electrical construction operations income before income taxes(1) resulting mainly from higher revenues and improved operating efficiencies. Margins on electrical construction operations operating income increased to 23.3% from 6.0%.(1) The results for the six months ended in 2015 included a pre-tax operating loss of $5.1 million on the now completed Texas projects.
  • Net income grew to $8.1 million ($0.32 per share) from $466,000 ($0.02 per share).
  • EBITDA(1) improved to $16.2 million from $4.5 million, as a result of the same factors which drove the growth in our pre-tax operating income.

Three months ended June 30, 2016, compared to the same period in 2015:

  • Revenue decreased 3.6% to $32.3 million from $33.5 million. Electrical construction revenue decreased 7.2%, mainly attributable to the completion in the second quarter of 2015 of certain large MSA projects in Texas, which have not been replaced thus far in 2016.
  • Income from continuing operations before taxes increased to $6.2 million from $2.8 million. This increase was fueled by a 71.2% increase in electrical construction operations income before income taxes(1) resulting mainly from improved operating margins attributable to performance of work on larger non-MSA bid jobs and completion in the second quarter of 2015 of certain unprofitable Texas work. Margins on electrical construction operations operating income increased to 23.5% from 12.9%.(1)
  • Net income grew to $3.8 million ($0.15 per share) from $1.3 million ($0.05 per share).
  • EBITDA(1) improved to $7.8 million from $4.3 million, as a result of the same factors which drove the growth in our pre-tax operating income.

Backlog

As of June 30, 2016, revenue from our project-specific firm contracts expected to be realized within twelve months decreased to $30.9 million from $38.1 million as of the same date last year. Total backlog was $163.9 million as of June 30, 2016, compared to $218.2 million as of June 30, 2015. Backlog is only estimated at a particular point in time and is not determinative of total revenue in any particular period. It does not reflect future revenue from a significant number of short-term projects undertaken and completed between the estimated dates. The decline resulted primarily from completion of work under existing MSA agreements not yet eligible for renewal. The size and amount of future projects awarded under MSAs cannot be determined with certainty and revenue from such contracts may vary substantially from current estimates.

President and Chief Executive Officer John H. Sottile said, "The strong mid-year results continue the turnaround for our electrical construction operations achieved in 2015. Although the demand for our construction services is subject to the ever-changing requirements of our utility customers, such demand generally remains strong. I am pleased with the progress we have made including improving operating efficiencies."

About Goldfield

Goldfield is a leading provider of electrical construction services engaged in the construction of electrical infrastructure for the utility industry and industrial customers, primarily in the Southeast and mid-Atlantic regions of the United States and in Texas.

For additional information on our 2016 second quarter results, please refer to our report on Form 10-Q being filed with the Securities and Exchange Commission and visit the Company's website at

http://www.goldfieldcorp.com.

___________________

(1) Represents Non-GAAP Financial Measure -- The non-GAAP financial measures used in this earnings release are more fully described in the accompanying supplemental data and reconciliation of non-GAAP financial measures to the reported GAAP measures. The non-GAAP measures in this press release and on The Goldfield Corporation's website are provided to enable investors and analysts to evaluate the Company's performance excluding the effects of certain items that impact the comparability of operating results between reporting periods and compare the Company's operating results with those of its competitors. These measures should be used to supplement, and not in lieu of, results prepared in conformity with GAAP. Because not all companies use identical calculations, this presentation of electrical construction operations operating income (loss), electrical construction operations income (loss) before taxes and EBITDA may not be comparable to other similarly-titled measures of other companies.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995 throughout this document. You can identify these statements by forward-looking words such as "may," "will," "expect," "anticipate," "believe," "estimate," "plan," and "continue" or similar words. We have based these statements on our current expectations about future events. Although we believe that our expectations reflected in or suggested by our forward-looking statements are reasonable, we cannot assure you that these expectations will be achieved. Our actual results may differ materially from what we currently expect. Factors that may affect the results of our operations include, among others: the level of construction activities by public utilities; the concentration of revenue from a limited number of utility customers; the loss of one or more significant customers; the timing and duration of construction projects for which we are engaged; our ability to estimate accurately with respect to fixed price construction contracts; and heightened competition in the electrical construction field, including intensification of price competition. Other factors that may affect the results of our operations include, among others: adverse weather; natural disasters; effects of climate changes; changes in generally accepted accounting principles; ability to obtain necessary permits from regulatory agencies; our ability to maintain or increase historical revenue and profit margins; general economic conditions, both nationally and in our region; adverse legislation or regulations; availability of skilled construction labor and materials and material increases in labor and material costs; and our ability to obtain additional and/or renew financing. Other important factors which could cause our actual results to differ materially from the forward-looking statements in this press release are detailed in the Company's Risk Factors and Management's Discussion and Analysis of Financial Condition and Results of Operation sections of our Annual Report on Form 10-K and Goldfield's other filings with the Securities and Exchange Commission, which are available on Goldfield's website: http://www.goldfieldcorp.com. We may not update these forward-looking statements, even in the event that our situation changes in the future, except as required by law.

 
 
The Goldfield Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
 
 
   Three Months Ended  Six Months Ended
   June 30,  June 30,
   2016  2015  2016  2015
Revenue                     
 Electrical construction  $30,890,691   $33,296,684   $65,732,195   $63,696,846  
 Other   1,365,782    157,221    2,283,261    303,867  
  Total revenue   32,256,473    33,453,905    68,015,456    64,000,713  
Costs and expenses                     
 Electrical construction   21,777,492    27,222,221    46,934,467    56,455,944  
 Other   977,578    143,143    1,634,908    270,878  
 Selling, general and administrative   1,644,005    1,477,422    3,074,417    2,479,131  
 Depreciation and amortization   1,543,869    1,658,424    3,081,843    3,272,269  
 (Gain) loss on sale of property and equipment   (1,294 )  11,564    18,143    17,192  
  Total costs and expenses   25,941,650    30,512,774    54,743,778    62,495,414  
   Total operating income   6,314,823    2,941,131    13,271,678    1,505,299  
Other income (expense), net                     
 Interest income   8,539    4,120    15,360    9,985  
 Interest expense   (151,742 )  (163,775 )  (311,291 )  (333,828 )
 Other income, net   14,082    17,461    29,460    32,837  
  Total other expense, net   (129,121 )  (142,194 )  (266,471 )  (291,006 )
Income from continuing operations before income taxes   6,185,702    2,798,937    13,005,207    1,214,293  
Income tax provision   2,271,458    1,285,701    4,790,947    547,392  
Income from continuing operations   3,914,244    1,513,236    8,214,260    666,901  
Loss from discontinued operations, net of income tax benefit of $42,193, $66,077, respectively in 2016 and $154,855 in 2015   (68,162 )  (201,037 )  (108,007 )  (201,037 )
Net income  $3,846,082   $1,312,199   $8,106,253   $465,864  
Net income (loss) per share of common stock -- basic and diluted                     
 Continuing operations  $0.15   $0.06   $0.32   $0.03  
 Discontinued operations   -    (0.01 )  -    (0.01 )
  Net income  $0.15   $0.05   $0.32   $0.02  
Weighted average shares outstanding -- basic and diluted   25,451,354    25,451,354    25,451,354    25,451,354  
                 
                 
                 
 
 
The Goldfield Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
 
 
  June 30,  December 31,
  2016  2015
ASSETS          
Current assets          
 Cash and cash equivalents $15,007,342   $11,374,238  
 Accounts receivable and accrued billings, net  22,768,205    17,250,067  
 Costs and estimated earnings in excess of billings on uncompleted contracts  9,560,907    10,292,199  
 Residential properties under construction  2,750,810    145,450  
 Prepaid expenses  1,375,947    1,210,780  
 Deferred income taxes  -    773,245  
 Other current assets  446,229    1,188,630  
  Total current assets  51,909,440    42,234,609  
           
Property, buildings and equipment, at cost, net  32,842,930    34,671,947  
Deferred charges and other assets  4,464,166    4,257,051  
Total assets $89,216,536   $81,163,607  
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Current liabilities          
 Accounts payable and accrued liabilities $9,246,035   $10,002,231  
 Contract loss accruals  65,405    65,322  
 Current portion of notes payable, net  6,100,314    5,815,510  
 Income taxes payable  106,954    483,763  
 Accrued remediation costs  263,171    135,786  
 Other current liabilities  1,686,344    234,161  
  Total current liabilities  17,468,223    16,736,773  
           
Deferred income taxes  7,415,308    8,328,492  
Accrued remediation costs, less current portion  95,420    107,429  
Notes payable, less current portion, net  20,803,906    20,656,402  
Other accrued liabilities  76,613    83,698  
Total liabilities  45,859,470    45,912,794  
Commitments and contingencies          
Stockholders' equity          
 Common stock  2,781,377    2,781,377  
 Capital surplus  18,481,683    18,481,683  
 Retained earnings  23,402,193    15,295,940  
 Common stock in treasury, at cost  (1,308,187 )  (1,308,187 )
  Total stockholders' equity  43,357,066    35,250,813  
Total liabilities and stockholders' equity $89,216,536   $81,163,607  
        
        
        
 
 
The Goldfield Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
 

Electrical construction operations operating income (loss), is defined as total operating income (loss) adjusted for non-electrical construction activity within total operating income (loss) including: other operations gross margins (loss) and non-electrical construction selling, general and administrative, depreciation and amortization, and gain or loss on sale of property and equipment. Electrical construction operations operating income (loss), a non-GAAP financial measure, does not purport to be an alternative to the Company's total operating income (loss) as a measure of operations. Because not all companies use identical calculations, this presentation of electrical construction operations operating income (loss) may not be comparable to other similarly-titled measures of other companies. We believe investors may benefit from the presentation of electrical construction operations operating income (loss) in evaluating our operating performance because it provides our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations and is useful in comparing our operating results with those of our competitors.

     
   Three Months Ended  Six Months Ended
   June 30,  June 30,
Electrical Construction Operations Operating Income  2016  2015  2016  2015
Total operating income (GAAP as reported)  $6,314,823   $2,941,131   $13,271,678   $1,505,299  
Total operating income (GAAP as reported) as a percentage of total revenue of $32,256,473, $33,453,905, $68,015,456 and $64,000,713, respectively   19.6 %  8.8 %  19.5 %  2.4 %
 Other operations gross margin   (388,204 )  (14,078 )  (648,353 )  (32,989 )
 Non-electrical construction selling, general and administrative   1,290,306    1,352,244    2,607,301    2,264,484  
 Non-electrical construction depreciation and amortization   30,561    31,354    60,923    61,842  
Electrical construction operations operating income  $7,247,486   $4,310,651   $15,291,549   $3,798,636  
Electrical construction operations operating income as a percentage of electrical construction revenue $30,890,691, $33,296,684, $65,732,195 and $63,696,846, respectively   23.5 %  12.9 %  23.3 %  6.0 %
                 
                 
                 
 
 
The Goldfield Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
 

Electrical construction operations income (loss) before income taxes, is defined as consolidated income (loss) from continuing operations before income taxes adjusted for non-electrical construction activity within income (loss) from continuing operations before income taxes including: other operations gross margins (loss) and non-electrical construction selling, general and administrative, depreciation and amortization, gain or loss on sale of property and equipment, interest income, interest expense, and other income. Electrical construction operations income (loss) before income taxes, a non-GAAP financial measure, does not purport to be an alternative to the Company's consolidated income (loss) from continuing operations before income taxes as a measure of income (loss). Because not all companies use identical calculations, this presentation of electrical construction operations income (loss) before income taxes may not be comparable to other similarly-titled measures of other companies. We believe investors may benefit from the presentation of electrical construction operations income (loss) before income taxes in evaluating our performance because it provides our investors with an additional tool to compare our performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core results and is useful in comparing our results with those of our competitors.

     
   Three Months Ended  Six Months Ended
   June 30,  June 30,
Electrical Construction Operations Income Before Income Taxes  2016  2015  2016  2015
Total income from continuing operations before income taxes (GAAP as reported)  $6,185,702   $2,798,937   $13,005,207   $1,214,293  
 Other operations gross margin   (388,204 )  (14,078 )  (648,353 )  (32,989 )
 Non-electrical construction selling, general and administrative   1,290,306    1,352,244    2,607,301    2,264,484  
 Non-electrical construction depreciation and amortization   30,561    31,354    60,923    61,842  
 Non-electrical construction interest (income)   (3,882 )  (2,173 )  (6,048 )  (4,372 )
 Non-electrical construction other (income), net   (11,435 )  (16,109 )  (26,138 )  (30,426 )
Electrical construction operations income before income taxes  $7,103,048   $4,150,175   $14,992,892   $3,472,832  
                 
                 
                 
 
 
The Goldfield Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
 

EBITDA, a non-GAAP performance measure used by management, is defined as net income (loss) plus: interest expense, provision (benefit) for income taxes and depreciation and amortization, as shown in the table below. EBITDA, a non-GAAP financial measure, does not purport to be an alternative to net income (loss) as a measure of operating performance. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly-titled measures of other companies. We use, and we believe investors benefit from the presentation of, EBITDA in evaluating our operating performance because it provides us and our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that EBITDA is useful to investors and other external users of our financial statements in evaluating our operating performance because EBITDA is widely used by investors to measure a company's operating performance without regard to items such as interest expense, taxes, and depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.

     
   Three Months Ended  Six Months Ended
   June 30,  June 30,
EBITDA  2016  2015  2016  2015
Net income (GAAP as reported)  $3,846,082  $1,312,199  $8,106,253  $465,864
 Interest expense   151,742   163,775   311,291   333,828
 Provision for income taxes, net (1)   2,229,265   1,130,846   4,724,870   392,537
 Depreciation and amortization (2)   1,543,869   1,658,424   3,081,843   3,272,269
EBITDA  $7,770,958  $4,265,244  $16,224,257  $4,464,498
___________                
(1)Provision for income tax, net is equal to the total amount of tax provision, which includes the tax benefit for discontinued operations.
(2) Depreciation and amortization includes depreciation on property, plant and equipment and amortization of finite-lived intangible assets.
 
 
 

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